A four-node, quadrilateral smoothing element is developed based upon a penalized-discrete-least-squares variational formulation. The smoothing methodology recovers C1-continuous stresses, thus enabling effective a posteriori error estimation and automatic adaptive mesh refinement. The element formulation is originated with a five-node macro-element configuration consisting of four triangular anisoparametric smoothing elements in a cross-diagonal pattern. This element pattern enables a convenient closed-form solution for the degrees of freedom of the interior node, resulting from enforcing explicitly a set of natural edge-wise penalty constraints. The degree-of-freedom reduction scheme leads to a very efficient formulation of a four-node quadrilateral smoothing element without any compromise in robustness and accuracy of the smoothing analysis. The application examples include stress recovery and error estimation in adaptive mesh refinement solutions for an elasticity problem and an aerospace structural component.